Why can’t I open a bank account?

When you’ve struggled with your money in the past, opening a bank account can be a lot more difficult than some people realise.

Many people take their bank account for granted. But for someone with a bad credit rating – whether that’s due to a past bankruptcy, for example, or general problems with debt – a bank account may seem like a luxury that simply isn’t available to them.

Bank accounts are important for all kinds of things: they provide somewhere safe to keep your money, a convenient way of making purchases and paying bills, and a convenient way to receive your earnings. All in all, a bank account just makes life simpler.

However, most account providers run some kind of credit check when you apply for a current account (the type of account normally advertised by banks). As such, if you have a particularly poor credit rating, you may find you’re not accepted for this type of account.

Fortunately, there are other options available. Here’s a quick look at what someone can do if they need a bank account for bad credit.

Basic bank account

Most banks and building societies provide some kind of basic bank account. As the name suggests, it’s a bank account that offers the basic facilities – somewhere to keep your money, a Direct Debit and/or standing order facility for paying bills, and sometimes a debit card or cashcard for making payments. Basic bank account providers may run a credit check when you apply, but they should be much easier to obtain than current accounts.

Using your basic bank account can help you to rebuild your credit rating over time (as long as you don’t experience any more problems with credit).

Bad credit bank account

Some bank account providers use the term ‘bad credit bank account’ – meaning a bank account specifically aimed at people with a bad credit rating. This is basically a different name for a basic bank account.